Matinas BioPharma Holdings, Inc. (MTNB) CEO Jerry Jabbour on Q4 2019 Results - Earnings Call Transcript

Matinas BioPharma Holdings, Inc. (NYSE:MTNB) Q4 2019 Results Earnings Conference Call March 9, 2020 8:00 AM ET

Company Participants

Peter Vozzo - Investor Relations

Jerry Jabbour - Chief Executive Officer

Terry Ferguson - Chief Medical Officer

Terry Matkovits - Chief Development Officer

Keith Kucinski - Chief Financial Officer.

Conference Call Participants

Robert Hazlett - BTIG

Edward Tenthoff - Piper Sandler

Greg Fraser - SunTrust

Jason McCarthy - Maxim Group

Operator

Greetings, and welcome to the Matinas BioPharma Fourth Quarter and Full Year 2019 Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded.

I would now like to turn the conference over to Peter Vozzo, Investor Relations representative from Matinas BioPharma. You may begin.

Peter Vozzo

Thank you, Rob. Good morning, everyone and thank you for joining the Matinas BioPharma fourth quarter and full year 2019 results conference call. Earlier this morning, we issued a press release with our fourth quarter and full year 2019 financial results along with business updates. The release is available on the Matinas BioPharma website under the Investors section.

Speaking on today's call will be Jerry Jabbour, Chief Executive Officer, Dr. Terry Ferguson, Chief Medical Officer, Dr. Terry Matkovits, Chief Development Officer and Keith Kucinski, Chief Financial Officer.

At this time, I would like to remind our listeners that remarks made during this call may state management's intentions, hopes, beliefs, expectations or projections of the future. These are forward-looking statements and involve risks and uncertainties. Forward-looking statements on this call are made pursuant to the Safe Harbor provisions of the Federal Securities Laws. These forward-looking statements are based on Matinas BioPharma's current expectations and actual results could differ materially. As a result, you should not place undue reliance on any forward-looking statements. Some of the factors that could cause actual results to differ materially from those contemplated by such forward-looking statements are discussed in the periodic reports Matinas BioPharma files with the Securities and Exchange Commission. These documents are available in the Investors section of the company's website and on the SEC's website. We encourage everyone to review these documents carefully.

An archive of this call will be posted to the company's website, also in the Investor Relations section. Following the company's prepared remarks, we will open up the call for question-and-answer session.

I will now turn the call over to Jerry.

Jerry Jabbour

Thank you, Peter. Good morning and welcome everyone. And thanks for taking the time to join us today as we provide a business update and discuss our 2019 fourth quarter and full year results. As we reflect on 2019 and the year-to-date, we are extremely proud of what our team has accomplished. Our achievements over this time as well as the enthusiasm and recent developments within the prescription omega-3 market making an exciting time to be at Matinas.

We’ve made substantial clinical and operational progress in the last 12-months, moving our two lead programs, MAT9001 and MAT2203, into key efficacy trials and building out the infrastructure to support these advancements, enhance it our head-to-head study of MAT9001 versus Amarin Corporation’s Vascepa represents a significant opportunity to once again highlight the superior profile of MAT9001 against the leading therapy in the prescription omega-3 space. We are also enthusiastic about the EnACT study of MAT2203 in patients with cryptococcal meningitis. The potential to effectively and safely deliver amphotericin B orally while crossing the blood brain barrier utilizing our LNC platform delivery technology could be an important breakthrough for patients and physicians.

Importantly for investors in our company, the timelines to impactful data and value inflection points from these studies are relatively compressed. We expect top line data from ENHANCE-IT in the fourth quarter of this year, and we should be in position to announce cohort progression in the EnACT trial as soon as the second quarter of this year.

This morning, I will provide a few high level comments on both MAT9001 and MAT2203, then turn the call over to Dr. Terry Ferguson who will further discuss the design of the ENHANCE-IT trial as well as recent developments impacting the omega 3 landscape. Then Dr. Terry Matkovits will discuss MAT2203 and provide an overview of the EnACT study in cryptococcal meningitis. Finally Keith Kucinski will provide a brief overview of our fourth quarter and full year 2019 financial results, before we open up the line for analyst questions.

For Mat9001, our next generation prescription only omega 3 fatty acid composition, the past year has been a period of consistent progress for this highly promising drug candidate. We took critical steps to solidify and build redundancy into our supply chain, and successfully manufactured multiple, technical and clinical batches of capsules, which we used to initiate and complete important supportive studies for MAT9001, [Indiscernible] regulatory pathway.

We recently completed clinical dosing for a comparative clinical bridging bioavailability study as well as the in-life portion of a 90-day comparative toxicology study. Once the final study reports from these studies become available, we expect to request and convene an End-of-Phase 2 meeting with the FDA in the third quarter of 2020 to discuss these data and gain agreement on the protocol for our Phase 3 study of MAT9001 in severe hypertriglyceridemia, which we expect to commence early next year.

We've assembled a well-respected regulatory advisory group for this meeting, led by individuals from Greenleaf [ph] health and from Covance, one of the top global contract research organizations. Immediately in front of us is the enhanced trial of MAT9001 versus Placebo. We are very pleased to have initiated this study in the first quarter of 2020, as commencing this study in a timely fashion was an important corporate priority for our team. We have already pre-screened more than 175 patients for this study and have taken additional steps to help ensure timely delivery of top line data later this year.

The treatment of dyslipidemia and its importance in the prevention of cardiovascular disease are rapidly evolving areas, and we have already seen some dramatic developments this year which Dr. Ferguson will discuss in more detail.

Our MAT9001 is a proprietary composition, which achieves high levels of eicosapentaenoic acid or EPA in the blodemiadeod, while also controlling the expression of PCSK9, a gene which provides instructions for making a protein that helps regulate the amount of cholesterol in the bloodstream. This unique impact, which we believe is attributable to the Docosapentaenoicacid or DPA contained in MAT9001 combines with enhanced potency for reducing triglycerides, potentially impacting the treatment of cardiovascular and metabolic conditions in ways no other prescription omega 3 therapy has to date.

The ENHANCE-IT study is the next major step in our clinical development program designed to highlight the impressive efficacy of MAT9001 and further distinguish its superior profile from placebo.

I will now turn to MAT2203, which is our oral formulation of the well-known fungicidal drug, amphotericin B. MAT2203 is our lead candidate based upon our lipid nano-crystal or LNC platform delivery technology. Amphotericin B which up until now could only be delivered intravenously is the gold standard for treating immunocompromised patients who are suffering from invasive fungal infections, such as cryptococcal meningitis due to its broad spectrum fungicidal nature. Its use however is greatly impacted by its toxicity profile, forcing physicians and patients to turn to much less desirable medicines when longer treatment periods are necessary. Based upon a strong preclinical data package as well as two phase two studies evaluating MAT2203 in the treatment of mucosal infections, The National Institutes of Health is financially supporting the investigation of MAT2203 for the treatment of cryptococcal meningitis, a very challenging fungal infection invading the brains of immunocompromised patients.

MAT2203 which allows for well tolerated oral administration of amphotericin B is well positioned to potentially become the drug of choice for the treatment of many invasive fungal infections. This potential, combined with a demonstration that our LNC platform delivery technology can be used to effectively deliver drug across the blood brain barrier makes the EnACT trial a very good gateway study for broad application of our platform delivery technology.

Invasive fungal infection trials are notoriously difficult to enrol, and can often take multiple years to identify the required number of patients. With EnACT however, we are fortunate to have the support of the National Institutes of Health and to be working with Dr. David Boulware and the University of Minnesota with direct access to immunocompromised HIV patients in Uganda, suffering from cryptococcal meningitis.

As a result, we expect to be able to enroll patients in this trial more efficiently than is typical for other severe fungal infection treatment trials, while still prioritizing patient safety. Dr. Matkovits will review the design of the EnACT trial and our expected timing for cohort progression a little bit later in the call.

I'd like to make a brief comment on the financial condition of the company before turning the call over to Dr. Ferguson. Earlier in the quarter, we took meaningful steps to financially strengthen our company well in advance of major, potential value creating milestones for our lead assets.

We capitalized on expressed interest from well-regarded, current and new institutional investors, and successfully completed a transformational financing, which extends our cash runway into the second half of 2022.

As a company, we are now poised to focus exclusively on execution, as we continue to advance our product candidates. I would now like to turn the call over to Dr. Terry Ferguson to provide details on ENHANCE-IT and some additional commentary on developments in the cardiovascular space.

Terry Ferguson

Thanks Jerry and good morning everyone. We're extremely excited to have recently initiated the ENHANCE-IT study for MAT9001. Simply stated, ENHANCE-IT is designed to compare the efficacy of MAT9001 and Vascepa across multiple lipid markers. Given the importance of higher EPA blood levels as a mechanistic driver for the cardiovascular risk reduction seen with Vascepa in the REDUCE-IT, trial; we will also be looking closely at differences in the achieved omega 3 blood levels for MAT9001 and Vascepa.

ENHANCE-IT is an open-label, randomized 28-day crossover study to assess the pharmacodynamics effects of MAT9001 versus Vascepa. The study will enroll approximately 100 adult men and women with elevated triglycerides between 150 milligrams and 499 milligrams per deciliter with at least 50% of the study subjects having triglyceride levels greater than or equal to 200 milligrams per deciliter.

The study will consist of two 28-day treatment periods with a washout period of at least 28 days in between treatments, and will be conducted at approximately eight sites in the United States. MAT9001 and Vascepa will each be administered twice daily with food in accordance with currently approved Vascepa labelling. Measured lipid parameters will include triglycerides, Total-, LDL-, VLDL-, HDL-, and non-HDL cholesterol, apolipoproteins A1, B and C3, and PCSK9. Omega-3 blood levels will be obtained at each baseline and at the end of each treatment period. The primary endpoint of the study is the percent change from baseline to end-of-treatment in plasma triglycerides.

I believe it's worth highlighting that MAT9001 is designed to be significantly more bio available than Vascepa and other ethyl-ester formulations of omega-3 fatty acids, and has more total omega-3 fatty acids than any other prescription omega-3 drug, either approved, or in development. We believe, that MAT9001’s ability to achieve significantly higher blood levels of critical omega-3 fatty acids as well as higher total omega-3 exposure can be a major driver for subsequent clinical success, as this class and the science around prescription omega-3 therapy products continues to evolve.

I also believe it's worth providing some perspective on recent developments in the omega-3 space, namely the STRENGTH outcomes trial with AstraZeneca’s prescription omega-3 Epanova. On January 13th, exactly eight weeks ago, AstraZeneca stopped their 13,000 patient STRENGTH trial, because there was “A low likelihood of demonstrating a benefit”.

At this point, we don't know anything more than the fact that the trial stopped, and given the complexity of closing down such a large global study, we're unlikely to actually see why until much later in the year.

In clinical trials, there are only two big things that drive outcomes. What you give, and who you give it to. It's worth noting that the scientific foundation that drove the study in the first place is still intact. No one is questioning the importance of triglycerides, and TG rich life of proteins as important contributors to cardiovascular risk. We're left with the treatment and the treated population in STRENGTH as the primary potential drivers for why the study was stopped.

All Omega-3s are not the same, and there are clear differences between what is in Epanova and what is in Vascepa. Epanova contains both EPA and DHA in an almost 3:1 ratio, while Vascepa contains just EPA. Mostly lipidologist don't believe that DHA is actually harmful, but there may simply be less EPA and Epanova and as we already know from REDUCE-IT, blood levels of EPA matter and seem to be the only biomarker that really mattered for outcomes.

More importantly at least in my mind, are differences in the study populations. 70% of the patients in REDUCE-IT were secondary prevention with a prior heart attack or stroke. And as discussed at the Vascepa FDA advisory committee, there were big differences in REDUCE-IT between secondary prevention patients and primary prevention patients, who had much lower event rates and curves that seemed to diverge much later.

Contrast that with STRENGTH, where fully half of the patients are primary prevention, and unlike REDUCE-IT, primary prevention patients in STRENGTH did not have to have diabetes. Finally, the follow up in STRENGTH is not expected to be as long as in REDUCE-IT. So now half of the patients in STRENGTH are primary prevention, with much lower event rates and numerically much less benefit than in secondary prevention, combined with event curves that tend to diverge much later and shorter follow up. Given that there simply may not have been enough time to show meaningful benefit in the much lower risk patients that make up half of the study; it might not seem quite so surprising that STRENGTH would be stopped early for futility.

More importantly, though what the stopping the STRENGTH study mean for Matinas. As I mentioned the acceptance of triglycerides, and TG rich life of proteins as major contributors to cardiovascular disease has not changed. And while some uncertainties around the ultimate role of omega-3s in primary prevention may remain for Matinas, this creates a much simpler, much less competitive path forward.

Nothing about the STRENGTH trial has changed our potential pathway to an indication to treat severe hypertriglyceridemia except a potential major competitor has gone away. The real remaining question is how MAT9001 compares to Vascepa, and the opportunity to have data from a second head-to-head study versus Vascepa in the fourth quarter of this year is exactly what clinicians will be looking for, where exactly where we need to be, and I believe that stopping the STRENGTH study has only if you'll excuse the expression strengthened our position.

In summary, I'm proud of the progress we've made in a relatively short period of time with MAT9001. And I'm encouraged by the continued enthusiasm I see for Omega-3s from the clinical and academic community. We look forward to providing top line data from ENHANCE-IT in the fourth quarter of this year.

And with that, I'll turn the call over to Terry Matkovits.

Terry Matkovits

Thanks Terry and good morning everyone. I will provide a few key highlights on MAT2203, our lead candidate based upon our LNC platform delivery technology, and discuss EnACT our-study-to-treat HIV infected patients with cryptococcal meningitis.

We recently announced that the independent data safety monitoring board unanimously voted to proceed with dosing in the efficacy phase of EnACT at 2 grams per day, the highest dose tested in the dose escalation phase. As of today, we are prepared to dose patients that present with the cryptococcal meningitis infection and otherwise meet the inclusion criteria for this trial.

Cryptococcal meningitis is a severe life threatening fungal infection of the central nervous system, and is currently an area of high unmet medical need with poor treatment alternatives. This phase 2 study is designed to explore the use of MAT2203 for both induction and maintenance therapy in these very sick patients.

Current standard of care involves a limited course with intravenous amphotericin due to its renal toxicity followed by an extended maintenance period of fluconazole treatment. Within this patient population, there is a mortality rate of upto 40% which underscores the ineffectiveness of the current treatment options.

Data from part one of this study demonstrated that MAT2203 was safe and well tolerated across all three daily doses tested. The part two efficacy phase of EnACT is a perspective randomized trial of approximately 100 patients evaluating the safety tolerability and efficacy of MAT2203 in HIV infected patients with cryptococcal meningitis, compared to the treatment with standard IV administered amphotericin B as induction therapy followed by maintenance treatment with MAT2203.

The induction period for all patients will be 14-days followed by an additional four weeks of treatment with MAT2203 during the maintenance phase. The 100 patients will be broken into four separate sequential cohorts of patients with each cohort increasing the treatment duration of MAT2203 versus IV amphotericin B.

The first cohort of 10 patients will be administered IV amphotericin for the first five days of the induction period followed by nine days of oral administration of MAT2203. The primary efficacy endpoint will be measured at day 14, the last day of the induction period and will include a measure of reduction in fungal count in the cerebrospinal fluid.

The independent DSMB will review all data for safety and efficacy and make a recommendation as to whether or not to proceed to the next cohort of patients There will be approximately 40 patients within cohort 2 and they will be administered IV amphotericin B for the first two days of the induction period, followed by 12-days of oral administration of MAT2203.

Cohort 3 will include 10 patients who will commence the induction period with oral administration of MAT2203 for five days followed by the IV administration of amphotericin B for nine days.

Finally, in cohort four, an additional 40 patients will receive oral MAT2203 for the entire 14-day induction period, and then throughout the subsequent maintenance period. As we previously guided, we believe that progression from cohort-to-cohort in this study during 2020 may be viewed positively and as a sign that MAT2203 is crossing the blood brain barrier and delivering drugs to the site of infection.

We anticipate that DSMB evaluation of the data from the first cohort of patients could come as soon as the second quarter of this year. Full data from EnACT however is not expected until the second half of 2021. We remain genuinely excited by the profile of MAT2203 and the potential solution it could provide to patients suffering from cryptococcal meningitis as well as other life threatening fungal infections.

It is also worth pointing out again that MAT2203 has been designated both a qualified infectious disease product, as well as an orphan drug. These designations could provide as much as 12-years of exclusivity for MAT2203 if approved which we believe is an important commercial advantage.

I would now like to turn the call over to Keith Kucinski, our CFO who will discuss our financial results for the quarter and the year.

Keith Kucinski

Thanks, Terry. Please refer to our press release issued earlier today for a summary of our financial results for the fourth quarter and full year of 2019. For the fourth quarter of 2019, the company reported a net loss attributable to common shareholders of $5.8 million or $0.04 per basic and diluted share, compared to a net loss attributable to common shareholders of $3.9 million or $0.04 per basic and diluted share for the same quarter of the previous year.

For the full year of 2019, the company reported a net loss attributable to common shareholders of $18.3 million or $0.13 per basic and diluted share compared to a net loss attributable to common shareholders of $15 million or $0.15 per basic and diluted share in 2018.

Research and development expenses were $3.4 million in the fourth quarter of 2019 compared to $1.7 million in the same quarter of 2018. Full year R&D expenses were $11.2 million in 2019 compared to $6.8 million in 2018. The increases for both the three month and 12-month periods were due primarily to higher preclinical and clinical development expenses, employee compensation, and manufacturing process development costs related to the development of MAT9001 and MAT2203.

General and administrative expenses were $2.3 million in the fourth quarter of 2019, compared to the previous year's fourth quarter G&A expenses of $2.5 million. For the full year 2019, G&A expenses were $7.8 million compared to $8 million in 2018. The slight decreases for both the three month and 12-month periods were due primarily to decreased employee compensation costs.

We ended 2019 with $27.8 million of cash, cash equivalents and marketable securities compared to $12.4 million at year-end 2018. This increase includes net proceeds of approximately $30.1 million from the company's public offering completed last March.

In addition, this January the company sold approximately 32.3 million shares of its common stock generating net proceeds of approximately $46.7 million after deducting underwriting discounts, commissions and other estimated offering expenses.

Based on current projections, the company believes that cash on hand is sufficient to fund operations into the second half of 2022. I'll now turn the call back over to Jerry for some closing remarks.

Jerry Jabbour

Thanks, Keith. I'll briefly summarize what we heard from the team, and I know we want to get quickly to analysts questions. But 2020 for Matinas is a huge year. And as we sit here today, you know on March 9th what we have in front of us is, we've already initiated two key clinical trials for our lead assets. And the data that we expect to see from these trials is coming up very very quickly.

All of the hard work that the entire team has put in during 2018, during 2019 has positioned us now to execute on these trials to continue to build out our infrastructure to supply our products not only through clinical development, but get ourselves ready for the eventual hopeful commercialization of these assets, and with data progression in EnACT as soon as the second quarter of 2020, and then the data that I think many many investors are looking forward to with ENHANCE-IT, a second head-to-head trial against placebo due in the fourth quarter of this year, we believe 2020 is going to be filled with news flow, certainly a lot of excitement about our product candidates, as we advance them for the benefit of patients.

And so with that, I will turn the call back to the operator for our question and answer session.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions]

Our first question today is coming from Bert Hazlett with BTIG. Please proceed with your question.

Robert Hazlett

Thank you. And thank you for taking the question. And thank you for the comprehensive comments on STRENGTH. I have two questions, one on 9001 and one on the LNC platform. On 9001, the -- the with the results that we have in hand with that construct as well as with STRENGTH, it appears that there will be a material, maybe a change in the marketplace based on, again these results that have come out of STRENGTH.

How do you think that, that could influence the ultimate position of 9001 in terms of patients that might be likely under consideration for that molecule? And then secondly on the LNC platform, you just discussed the deliverables for the Genentech collaboration. When do they do, what’s do, and -- or is that the same construct that the other -- the other agreements take? Thank you.

Jerry Jabbour

Great, thanks Bert. Appreciate the question. So we'll start with MAT9001 and yes, obviously you know as we look to advance MAT9001, we take into account both the head-to-head data we generated against Vascepa for the first time, and what's happened in the marketplace. And prior to the STRENGTH announcement, in January there was, I think the impression in the belief that you could have an overall class effect potential there with a combination of a positive REDUCE-IT and a positive STRENGTH. And I think, we'll have to wait to see the exact reasons as Dr. Ferguson alluded to for the reasons why STRENGTH went down, but at the same time I think it's important to emphasize that reduction in competition.

It's on one hand; it's nice to have an overall class effect, where omega-3s there is a rising tide that lifts all those boats. At the same time, the rising tide lifts all the boats. I think what STRENGTH will ultimately tell us is that all Omega-3s are not the same. And at the end of the day, you look back to the profile of MAT9001 versus Vascepa, and the continued data that comes out of REDUCE-IT highlighting the importance of blood levels of omega-3.

So when you look at the reduction in competition on the one hand, we think overall that's a good thing for a company like Matinas. And then if you look at the profile of MAT9001 versus Vascepa, we know that we're going to have a drug that's highly bioavailable, where we're going to be able to achieve high blood levels of EPA. And we're also going to have some unique impact on lipids that Vascepa does not have, and I think that's why the ENHANCE-IT study is so important. That's not a study, that's required for approval of this drug, but you have to look at it in terms of its ability to distinguish our drug from the market leader in the space.

And so, from an addressable patient population, our pathway is very very clear. The pathway to an approval in severe hypertriglyceridemia has not changed, and that approval we believe you can get with a single Phase 3 study in patients with severe hypertriglyceridemia. That's our focus. That's our goal. Getting approval for that indication as quickly as possible, and then utilize the two head-to-head studies that we have to give physicians and patients the ability to look at our drug versus Vascepa and certainly we would have similar discussions with payers as to what other indications may be available to MAT9001, I think we're open and continue to investigate a number of those which would give us access to a larger patient population than severe hypertriglyceridemia, but we need to see data from STRENGTH. We will have a discussion with the FDA about our own development path, but in the meantime, we are very clear that we can get an approval for severe hypertriglyceridemia and we will continue to take advantage of the evolving science to understand how the profile of our drug could benefit patients in a broader patient population. But Dr. Ferguson, you want to add anything to that?

Terry Ferguson

Just really briefly, I think that the needs around treating dyslipidemia have not gone away, and have not changed. There's lots of discussion in the clinical world now, about persistent cardiovascular risk rather than just residual cardiovascular risk, and the importance of secondary prevention. I think that there are questions as I mentioned that arise around, what role this is going to play in primary prevention. But again, we need to learn more about the primary prevention and secondary prevention cohorts in the STRENGTH study.

I think dyslipidemia has not gone away. And I think that as Jerry mentioned, our path towards severe hypertriglyceridemia has not changed. We're just going to be learning a lot more about what extends beyond that.

Jerry Jabbour

And Bert, just one final comment. I mean, I think that we will continue to look at the potency of our drug and the availability for multiple different doses of our drug having the same impact on the severe hypertriglyceridemia patients. So whether it's the overall potency and bioavailability or the opportunity to have different doses than Vascepa has approved, they are only approved at a 4 gram a day dose. We think there are going to be some competitive advantages we have, without having to go through a six year outcome study.

Jumping quickly to Genentech, obviously that was an important collaboration for us to kind of announce at the end of 2019. They've expressed a lot of interest. We've entertained their team here in our labs, in early January. We've gotten one of the molecules that they're targeting. We're really not at liberty to talk a lot about the details in terms of what that is, or what the target is. But given kind of the interest and the number, the amount of dialogue between the two companies, there's a lot of interest there, and there's a lot of momentum. So we are already in the formulation stage of that for at least one of their molecules that does take a period of time.

Typically the way I mean, it's very much bird structured like the other collaborations where we are preparing a few different formulations of target molecules for these companies to then take into proof-of-concept testing that may be different depending on what molecule and what therapeutic category you're in, but that's usually a period of months and so we would expect potentially in the back half of this year to be able to see data from what our collaborators then do with the molecules, that we formulate for them.

So that continues to advance. We're really excited about that. The same is true of ViiV. We have already kind of worked on two different formulations for ViiV in the antiviral space. And we continue to believe that the platform can become a solution for a lot of these drugs that have challenges either with safety profiles or getting into Targets issues.

Robert Hazlett

Thanks. Looks like an eventful 2020. Look forward to data and progress on all the programs. Thank you.

Jerry Jabbour

Thanks.

Operator

The next question is from the line of Edward Tenthoff with Piper Sandler. Please proceed with your question.

Edward Tenthoff

Great. Thank you very much. Good morning, everyone. So I wanted to ask you a little bit more just with respect to the analysis around that, in the sense that, you know I know it's a phase 2 study really designed to replicate what we saw in the Phase 1. But what are some of the assumptions around the change in triglyceride levels, and what would you be able to show statistical significance from disciplining patients? Thanks so much.

Jerry Jabbour

I think that that as you look at where -- how ENHANCE-IT compares to the prior study. It's generally the same triglyceride population. It's a larger number of patients treated for a longer period of time. And I think that you can look to the prior study and the other big difference is that this is not on a very low fat diet. So I think that you can look to the prior study to provide directional guidance and ballpark estimates, and one of the concerns about the prior study was that Vascepa sort of underperformed probably as a consequence of the diet with only about a 11% reduction in triglycerides.

As you look at what it has achieved in other trials and you look at REDUCE-IT where there was about a 19% reduction in triglycerides, and then recognize that even in the prior head-to-head study with a very low fat diet, MAT9001 was able to reduce triglycerides by a little over 30%. I think that you get a ballpark figure. And the study is powered at 90% to detect a 10% absolute difference in changes in triglyceride.

So I think that, that's a reasonable assumption. I think it's highly likely that you'll see a statistically significant difference in triglyceride reduction, and that's sort of guided by what we've seen in prior studies.

Terry Ferguson

And then the only thing I would add to that Ted is, there was a lot made about the diet, in the first study. And let's be clear, that's really a diet, that's a reality of the patients, you're trying to treat here, or they should be on lower fat diets. That notwithstanding, the reality of the way ethyl-esters and free fatty acids are absorbed. Yes, and ethyl-ester is better absorbed with a meal that has a higher fat content.

And so we do expect that Vascepa’s absorption will improve, and we expect that its numbers will look more like they did in REDUCE-IT, but there is no reason to expect that they're going to look better, and at the same time based upon data that exists that was generated with Epanova, which is also a free fatty acid you know that absorption of a free fatty acid will also improve with a meal with a higher fat content.

So the change in diet from the first study to the second study may bring Vascepa up a little bit, but it's not going to disadvantage MAT9001 in terms of absorption. And if anything, it's going to enhance the absorption of our drug as well. So the statistics aside, which I always let Dr. Ferguson deal with, we feel very good about study design, and it's really about taking the bullets out of the gun, of anybody trying to poke holes in terms of the first studies. So and I'll leave it at that.

Operator

The next question is from the line of Greg Fraser with SunTrust. Please proceed with your questions.

Greg Fraser

Thanks. Good morning folks. It’s Greg Fraser on for Gregg Gilbert. Can you first comment on the importance of the comparative bioavailability study, and when you expect that study to read out? And then, can you also comment on how we should think about SG&A and R&D stand in 2020?

Jerry Jabbour

Sure. So first with -- with the importance of the comparative bioavailability study, it's all about the 505(b)(2) pathway. And what you're looking at there is you're looking at comparative bioavailability of our drug MAT9001 versus your Comparator Lovaza. And what you're trying to look at in that study is, what are the blood levels, of omega-3s for example in that study? And is there anything when you look at what is achieved with MAT9001 versus Lovaza which causes a safety concern. This is not a study designed to show bioequivalence. That's not the purpose of this study. It's relative bioavailability, under both fed and fasted conditions, so as to determine whether or not there is a reason for a safety concern in the eyes of FDA.

So, and that's all about allowing you then to rely upon the safety data generated by Lovaza over years and years and years, to shorten your development pathway and how does a number of patients that need to be exposed to your drug or anything else, the FDA would like to see from a toxicity perspective, which would give them concern. And this is a study that was also done by Epanova with by [Indiscernible] with Epinova versus Lovaza. So we have some idea what to expect. And because it's not bioequivalence, there is a range where you would expect you know the FDA to get comfortable. And again, this is about relative bioavailability so as to raise a safety concern, but the overall profile of omega-3 you feel pretty good about safety.

We've completed kind of a clinical dosing in that study and so the data is being compiled, a final study report will be available over the next few months. And then that's not data that may be published at some point down the line, but it's not -- that's not press release data that's simply going to be used as part of a briefing package with the FDA for the end of Phase 2 meeting. But we expect to have that in the next few months, and then again as we've said, you know have an end of Phase 2 meeting, but we'll talk about that plus the 90-day comparative talks with FDA, and then get that agreement on the protocol for Phase 3.

In terms of SG&A, in 2020 it will increase over 2019 mostly because of the conduct of the ENHANCE-IT trial. We will also make additional accommodations for product supply in preparation for Phase 3. And we can provide some more color in terms of increase, but it’s certainly going to be higher than 2019, but we're not into yet Phase 3 territory yet. And so we would expect actually 2021 to be a bigger year than 2020.

Greg Fraser

Got it. Thank you.

Operator

[Operator Instructions] Your next question is from the line of Jason McCarthy with Maxim Group. Please proceed with your questions.

Jason McCarthy

Hello, thanks for taking the question. Jerry, can you talk a little bit about MAT2203, in particular the 2 gram per day dosing, and how that compares to what a patient would see with IV dosing in terms of potential toxicity? Also sticking with potential partnerships, I know you had talked a little bit about Genentech, but for your antifungal asset, we've seen some activity in this space, you know relatively recently with Sedara [ph] and MundiPharma and then Pfizer with Basilea that that deal was enhanced relatively recently also, is that something that you're thinking about for 2203, maybe finding a partnership with pharma kind of moving back towards the antifungal space?

Jerry Jabbour

Jason. Yes. Good good questions. And thanks for being on the call, and thank you for again finding a way to use the term ENHANCE-IT as part of your question. I think that that was great.

Jason McCarthy

Sorry, I didn't actually even realize.

Jerry Jabbour

Okay, let’s say it just rolls off the tongue. So for 2203, the purpose of part 1 of that study was to establish what the maximum tolerated dose is. And so what you want to do is, you want to set yourself up for success, and you're always going to have a low and middle and a high dose and the hope is that the high dose is going to be the one you take forward into the efficacy portion of the study, because what you want to do is without sacrificing patients safety, you want to increase the exposure to the drug to give yourself the greatest opportunity to have an impact on the infection.

And so, but you need to look at the doses given in the cryptococcal meningitis study and just opposed to or compare that with what doses of MAT2203 we have taken into previous studies. For example, in the study with the NIH of which patients are still taking that drug, 800 milligrams a day for three years with no toxicity. That was 800 milligrams a day. And yet the lowest dose that we took into Part 1 of the cryptococcal meningitis study was 1 gram a day.

And then we took one and a half, and then two. And what you saw with these patients even at two grams a day, you didn't see any change in potassium or creatinine levels, you didn't see any reasons for concern, you also didn't see any meaningful tolerability impact on these patients. So the fact that the DSMB who's independent, who looked at all of the data said yes, we'll go with 2 grams a day that's more than 2x the amount from an efficacy perspective the patients were taking in the NIH study. And because of the duration of the NIH study, and how long those patients have been exposed to 800 milligrams a day, it gave everyone comfort that we arrived at the right dose from a safety perspective, but also gave us the best opportunity we think to impact you know cryptococcal meningitis with 2 grams a day.

That will also be broken up, the 2 grams a day is not all at once. So that's also broken up over the course of the day. Remember, this is an oral suspension, very easy for the patients to take, it will be broken up into four separate doses of, about 400 milligrams or 500 milligrams a day, which should also help them with tolerability too. So we couldn't be more pleased with how the results of part one went. And we do feel that part two in from a dosing perspective is set up well, and we just have to balance that against the challenging nature of the cryptococcal meningitis infection, and the additional barrier or challenge of crossing the blood brain barrier. But again, that's supported by multiple studies showing the ability of our technology to do that pre clinically.

So we'll see dosing will begin in that study imminently. And, right around the end of the second quarter, we will be in a position to kind of inform the market about cohort progression to stage two.

In terms of what that means for partnerships. I think this data is essential, to looking at MAT2203 to be used broadly, and it's an ideal drug for a partnership. Because there are -- there is no question that the need, the unmet need is only growing. Yes, infectious disease has been a tough area for investors and companies who have failed over the past couple of years, a lot of that failure has to do with safety. We believe our technology kind of mitigates those safety risks. But yes, upon a successful EnACT, we believe that this is an ideal drug for a partnership who already has an infectious disease franchise, because the reality is, if EnACT is successful, and not only are you crossing the blood brain barrier to deal with cryptococcal meningitis, the way this is set up from a regulatory perspective under 505(b)(2), the ability to then broaden indications into other treatments of invasive fungal infections. It's not immediate, but it's faster than it would be otherwise. And you're going to have doctors who are relying on 40 to 50 years of clinical experience with amphotericin now with not only efficacy data from EnACT, but the overall safety profile of our drug developed over the last three years at the NIH, giving physicians the comfort to use this more broadly than amphotericin has ever been used before. So EnACT is definitely a big part of 2020 for us.

Jason McCarthy

Okay, just real quick, just going back to your partnerships. You had mentioned, ViiV Healthcare with Glaxo. They are in the antiviral space. Has there been any discussion of moving forward with something for Corona? Have they talked about that, or is that just here shortly?

Jerry Jabbour

So obviously, we're getting into pretty interesting territory. And we've seen, a lot of companies take advantage of some of the hype around this, to say that they're working in this area. And we certainly don't want to use this call as an opportunity to simply jump on the bandwagon. But what I can say is, we do believe our technology has the ability to effectively deliver antivirals. There's a lot that remains to be seen about how to effectively treat Corona virus. A lot of those, prospective medicines are in clinical trials, were probably six months to a year away and they're all IV delivered. Do we have the ability potentially, to help deliver a vaccine and provide an oral version of that? The answer to that is yes.

We are in active dialogues with NIH to find out how we can become a part of this, and there actually is a movement, a coalition going on, but we're not out front waving the flag on this. We obviously have a lot of other things to concentrate on. But you better believe we raised our hands when the NIH said, can we combine a lot of what we're trying to do with what we've seen your delivery platform technology do. And so we'll see. As to specifically with ViiV, we've limited our discussions there to kind of what their intended targets were at the beginning. But it certainly doesn't mean that we're not paying attention to how we may be able to contribute in to something which is obviously creating a lot of waves in the markets and around the world.

Jason McCarthy

Right. Thank you, Jerry.

Operator

Thank you. At this time, we've reached the end of our question and answer session. And I'll turn the floor back to Jerry Jabbour for closing remarks.

Jerry Jabbour

Thanks, Rob. Obviously thanks everyone for participating in our call today, for your patience. We wanted to provide an opportunity to go into great detail on our -- the two studies that we're executing on. We believe, both EnACT and ENHANCE-IT represent not only great opportunities for patients, but certainly over the course of 2020 can be important, value inflection points for investors. We look forward to keeping you apprised as to our progress, and wish everyone a great day. Thanks.

Operator

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.